Why has Walmart not failed due to opposition?

[msmith537]

@lavenderlemon

That isn’t Wal-Mart. The company sucks up tax dollars and drives down wages.

Not my wages. Not that you have demonstrated proof of either statement.

[JohnT]

And you know why? Because of the United Auto Workers, who pressured GM and Ford into providing ludicrously good health and retirement plans which the companies can’t afford. A perfect example of how just wishing for high-paying, high-benefits jobs doesn’t make it so. The unions got greedy, the auto execs caved in to them, and now they’re both going to pay the price.

Just FYI, GM’s average per-hour labor costs on its North American employees was $74 in FY2004.

[RaftPeople]

@Sam Stone

First, if Wal-Mart wasn’t there, those people would make NOTHING

Not correct.

The demand by consumers does not disappear because one supplier disappears.

The demand clearly exists, so if wal-mart didn’t exist, one or many other companies would meet that demand, which would require them to employ people to support that business.

Those other companies may or may not pay the same as wal-mart.

[Sam_Stone]

You’l either get a company the same size as Wal-Mart, employing the same number of people, or you’ll get one with fewer people and higher prices. And if the prices are higher, consumers will buy fewer things, and the company will be smaller. Jobs will be lost.

There are no free lunches.

[RaftPeople]

@Sam Stone

You’l either get a company the same size as Wal-Mart, employing the same number of people, or you’ll get one with fewer people and higher prices. And if the prices are higher, consumers will buy fewer things, and the company will be smaller. Jobs will be lost.

There are no free lunches.

Or you will get more companies filling that space, possibly charging higher prices, but also, possibly paying employees more.

I agree, there is no free lunch.

But, all things being equal, withing the exact same market space, market share, etc., there could be a company that treats it’s employees better than a different company.

If so, the trade off is obviously profits to the shareholders, exceutives or management.

[Sam_Stone]

[/quote]

If so, the trade off is obviously profits to the shareholders, exceutives or management

[/quote]

No, because as has been pointed out, if you took every nickel of profit Wal-Mart made and spread it among its employees, you could only raise their salary by $4/hr. And the executive compensation is trivial compared to the overall revenue of the company. They could all work for free and it wouldn’t make much of an impact at all on worker salaries.

The bottom line is that when you build a business on a model of low prices, low margins, and large staff, you’re going to be limited on how much you can pay the staff.

[RaftPeople]

@Sam Stone

If so, the trade off is obviously profits to the shareholders, exceutives or management

[/quote]

No, because as has been pointed out, if you took every nickel of profit Wal-Mart made and spread it among its employees, you could only raise their salary by $4/hr. And the executive compensation is trivial compared to the overall revenue of the company. They could all work for free and it wouldn’t make much of an impact at all on worker salaries.

The bottom line is that when you build a business on a model of low prices, low margins, and large staff, you’re going to be limited on how much you can pay the staff.
[/QUOTE]

So if a company increases compensaton to employees and prices remain the same, are you saying that the trade off is not “to the shareholders, executives or management”?
I assume you didn’t really want to disagree with the statement that I made, but rather you wanted to make the point that even if the trade-off is accurate as stated, the difference to the employee is minor.

If that is your point, I wouldn’t necessarily disagree.

But you could have a company like wal-mart that raised it’s prices a little (not much is required) and passed that on to it’s employees. Of course you may argue that the company would then be undercut by it’s rivals, but due to wal-marts size and purchasing power, that may not be the case. It dwarfs the other retailers.

[Shalmanese]

@RaftPeople

So if a company increases compensaton to employees and prices remain the same, are you saying that the trade off is not “to the shareholders, executives or management”?

I assume you didn’t really want to disagree with the statement that I made, but rather you wanted to make the point that even if the trade-off is accurate as stated, the difference to the employee is minor.

If that is your point, I wouldn’t necessarily disagree.

But you could have a company like wal-mart that raised it’s prices a little (not much is required) and passed that on to it’s employees. Of course you may argue that the company would then be undercut by it’s rivals, but due to wal-marts size and purchasing power, that may not be the case. It dwarfs the other retailers.

If the company could raise prices (even just a little) and not give any to the employees, thus increase total profits, don’t you think they would have done it already? Your in effect stating that you know more about the retail business than the most successful company in the world.

[John_Mace]

@RaftPeople

But you could have a company like wal-mart that raised it’s prices a little (not much is required) and passed that on to it’s employees. Of course you may argue that the company would then be undercut by it’s rivals, but due to wal-marts size and purchasing power, that may not be the case. It dwarfs the other retailers.

And how does this company do it, exaclty? Tell you what. Why don’t you start that company, pay your eimployees higher wages than WalMart, and surely you’ll have most of the WalMart employeed defect to your company and you will put WalMart out of business. Sounds like a good business model. Go out and raise the cash for this new business, and report back here in 10 years to tell us how you made out.

[RaftPeople]

Shalmanese and John Mace, I think you may have mis-interpreted my comments.

I didn’t claim to know more than wal-mart, nor did I claim I am capable of creating a company as successful as wal-mart.

I also didn’t claim they should increase employee wages.

I merely was stating that it is possible to pay employees more. That’s all.

Shalmanese, you state that if they could increase wages without hurting profits they would, but I would argue that is not in their best interests as a company. There is no motivation to treat employees better, so why do it.

[John_Mace]

@RaftPeople

I merely was stating that it is possible to pay employees more. That’s all.

Oh… OK.

[Shalmanese]

@RaftPeople

I merely was stating that it is possible to pay employees more. That’s all.

Shalmanese, you state that if they could increase wages without hurting profits they would, but I would argue that is not in their best interests as a company. There is no motivation to treat employees better, so why do it.

No, I stated that if they could raise prices more, they would.

And as I stated earlier in the thread, the changes their critics want them to make would wipe out 2/3rds of their profit. It would take quite a “motivation” for a company to voulantarily do that.

[LavenderBlue]

@John Mace

Can you clarify in one post, with the necessary excerpts to support it, how you arrived at that last conclusion. If you’ve already done this in an earlier post, just let me know which post # to refer to.

And isn’t WalMart a $250B company, or there abouts? If we “gave” then $1B in subsidies, that would be $1 out of every $250, no?

I’m sorry I haven’t replied to this sooner but I have been very busy.

Shalmanese stated:

Walmart has a total profit of $10 bn a year.

The CNN article I quoted states:
http://money.cnn.com/2004/05/24/news/fortune500/walmart_subsidies/

Over $1 billion in government subsidies have gone into transforming discounter Wal-Mart Stores from a regional discount store operator into the world’s largest retailer, according to a report Monday from Good Jobs First, a Washington-based subsidy watchdog group.

[LavenderBlue]

@JohnT

Not to paraphrase or anything, but Wal-Mart had a better year.

GM is likely to go bankrupt in the next year or two (current consensus on another message board has it being in severe trouble December/January) and just today it’s entire short-term commercial paper, both GM and GMAC, was declared “junk” by the rating agencies. We’re talking about $300 billion in debt, much of which will have to be sold in the next couple of days as laws and regulations against institutional investors (such as CALPERS) holding junk bonds.

So bringing up Mr. Scott’s compensation viz a viz Wagoners does not make Scott look bad, regardless of your position.

Cite?

And maybe Wal-Mart is in better shape because unlike GM they get the government to pay for their worker’s health care costs?

[LavenderBlue]

@Sam Stone

So you’re saying that a single person making $9.18/hr qualifies for welfare?

And just to be clearer, are you saying that NO ONE should work for $9.18/hr? Or is it just Wal-Mart employees that should not be allowed to work for this wage?

I’m arguing that a company that does not pay most full time workers enough to afford their own health insurance costs and not need additional government help in the form of items like food stamps cannot be considered a truly successful nor admirable company.

The fact that this company is currently America’s largest is very disturbing. It’s one thing to pay SOME of your employees $9.18 an hour. It’s quite another to pay such a low average way for ALL of your employees.

‘Encourage’? Who’s encouraging them? Other than the people who buy Wal-Mart’s products?

Did you read any of the articles I linked to? Our government is encouraging them in the form of needless subsidies.

If you’re talking about government subsidy, I heartily agree. Government should not be subsidizing business. That’s an issue that has nothing to do with whether Wal-Mart should be allowed to pay its employees ‘only’ close to twice the minimum wage.

Yes I was talking about government subsidies. Those subsidies are directly linked to the fact that Wal-Mart pays workers very low wages. The workers cannot afford to pay their own health care costs and in many cases qualify for food stamps and housing help.

Hence we are all subsidizing Wal-Mart’s profits. If, like other businesses, they actually had to pay for their worker’s health care costs, would they remain in business?

That ‘study’ is totally bogus. The claim is that people who make $9.18/hr have to be subsidized, therefore Wal-Mart is being subsidized by the government. That’s ridiculous on its face for several reasons: First, if Wal-Mart wasn’t there, those people would make NOTHING. Second, the same argument can be made for any business that pays its employees that kind of money.

Many people who make $9.18 an hour full time DO get qualify for government subsidies. That’s simply a fact. In addition there’s no evidence that if it weren’t for Wal-Mart these workers wouldn’t have jobs at all. And yes obviously the same holds true for any business that does that. What’s disturbing about Wal-Mart is their status as America’s largest employer.

Third, it’s only true if every employee at Wal-Mart is the sole breadwinner for a family of four. Which is demonstrably false.

Cite?

Because because there are in fact lots of families for whom Wal-Mart is indeed their only employment.

According to this article:
http://query.nytimes.com/gst/abstract.html?res=FA0D14FA35590C728CDDA80994DC404482

Critics say Wal-Mart’s miserly approach to employee health care is forcing many of its workers and their families into state insurance programs or making them rely on charity care by hospitals; survey by Georgia officials finds more than 10,000 children of Wal-Mart employees are in state’s health program for children at annual cost of nearly $10 million to taxpayers;

The other thing wrong with that study is that it totally ignores the fact that Wal-Mart’s primary clientele is people with low incomes, all of whom benefit from Wal-Mart’s low prices.

But there’s a cost to those low prices in the form of lower wages. How much of a benefit can they really ultimately derive if Wal-Mart is the company setting the standard for wages in their community?

So… The ‘better and fairer’ company gets the money to be ‘fairer’ from where? The money fairy? Again, Wal-Mart’s entire operating profit would not sustain an across-the-board pay raise of $4/hr for its employees. So the only way Wal-Mart can pay more people is to A) fire some of them and move to a less labor-intensive model by cutting service, B) raise prices, which hurts other poor people.

Then perhaps the government subsidy fairy can find another company to help instead? Perhaps one that ultimately doesn’t demand community subsidies for ordinary workers while over-paying top management?

Which one would you like?

I would like a company that can figure out how to pay all full time workers enough so they can afford their own health insurance and . I would like a company who’s business model isn’t based on sucking at the public trough. I would like a company that doesn’t have a CEO who has the unmitigated gaul to whine that his employees actually want a living wage.

By the way, a labor cite from AFL/CIO is about as disinterested and impartial as a cite from the Wal-Mart stockholder’s report.

Do you have cite that disputes what’s in the report?

Ah. So… How come all those employees aren’t studying nursing now? Let’s see… Wal-Mart employs roughly 1.5 million people. If nursing school costs on average $20,000, it would cost 300 billion dollars to put them all through.

You have stated that they would all be without a job if it weren’t for the benevolence of Wal-Mart’s largess. This is untrue.

Frankly, this is a silly and condescending argument you’re making. YOU know best, right? These people who freely choose to work at Wal-Mart should be stopped for their own good and put into jobs YOU think are better?

Many of the articles I’ve quoted point out that a number of employees have very llimited options when it comes to employement in their communities. They may work there but it doesn’t mean they particularly like it. Wal-Mart has a large turnover rate and has to hire thousands of new employees each year so clearly company loyalty is very low.

Why are you so quick to defend a company that relies so heavily on government subsidies?

Except for, you know, all the working people that had to drive crappy Pintos instead of high quality Toyota Camrys. Don’t they count? Or should other working class people be forced to pay higher prices for lower quality vehicles?

General Motors has fired huge chunks of its work force, and today had its bond rating reduced to ‘junk’ status. It may go under, and we’ll lose ALL those jobs. And you know why? Because of the United Auto Workers, who pressured GM and Ford into providing ludicrously good health and retirement plans which the companies can’t afford. A perfect example of how just wishing for high-paying, high-benefits jobs doesn’t make it so. The unions got greedy, the auto execs caved in to them, and now they’re both going to pay the price.

So in the meantime we’re supposed to salute and admire a company where the business model is based on wages so low people can’t afford health insurance or decent housing? Given that the average wage at Wal-Mart is under 20K it’s clear most people who work there would struggle to afford any form of transportation let alone high quality cars.

And you can’t get any greedier than a company CEO who’s being paid $17 million a year.

[LavenderBlue]

@msmith537

Not my wages. Not that you have demonstrated proof of either statement.

Do you live in Georgia?
http://www.findarticles.com/p/articles/mi_qa4103/is_200404/ai_n9384014

In 2002, the time period covered, Wal-Mart employed 42,000 associates in Georgia. Wal-Mart is Georgia’s largest private employer. Wal-Mart is the largest private employer in the U.S., employing over 1.05 million associates in 2002.

Almost a quarter of employees at Georgia’s Wal-Marts qualify to enroll their children in Medicaid.

Or Florida?

http://www.tallahassee.com/mld/democrat/news/opinion/11426271.htm

In Florida, Wal-Mart has 91,000 employees. Every time an uninsured Wal-Mart worker goes to the ER and can’t afford to pay for treatments, all Floridians are picking up the bill.

What about California?
http://www.cbsnews.com/stories/2004/08/07/eveningnews/main634599.shtml

A recent University of California, Berkeley study found that the fast growing retailer takes more from communities than it gives.

“Because of the low wages and because people do not have health insurance through their employer, people rely on public support to make ends meet,” says the school’s Ken Jacobs.

Estimates are the result is a tab to California taxpayers of $82-million a year for health care, food stamps, and other social services.

Even if you don’t everytime you pay for medicaid you subsidize Wal-Mart’s profits.

[JohnT]

@lavenderlemon

Cite?

And maybe Wal-Mart is in better shape because unlike GM they get the government to pay for their worker’s health care costs?

Cite on what? GM’s problems, which have been front page news for the past two weeks? A non-SMDB message board discussion that I’m having with some other people? A cite on the effect of the debt-downgrading will have on the nations bond markets? I’m not too sure what cite you need.

If you had read the article more closely, you would have seen that Wal-Mart received over $1 billion in subsidies since 1990, not “last year” as you claimed. For a company that has earned $3 trillion in revenue since that date, we’re talking about subsidies of less than .033% of sales. If you’re not good at reading percentages, that’s 1/3 of 1% of sales. Wait… it’s even smaller than that (small percentiles do that to me)… that’s 1/3 of 1/10 of a percent of sales.

Note, also, that the original report (you did read it (PDF) didn’t you?) includes in its definition of subsidies such indirect Federal giveaways designed to help America’s most troubled areas such as Enterprise Zones, job training assistance, and the standard infrastructure improvements that must be in place regardless of what is being built - stores, factories, homes… they all need water, gas, and roads. Many of these programs were put in place to help the poor, now you’re arguing they’re not worth it because they help people remain poor!

Welcome to the fiscally conservative mindset.

And in regards to subsidies, a billion over 14 years spread over 50 states and hundreds of municipalities is chump change. Toyota received a $400 million subsidy on just one factory in San Antonio. DaimlerChrysler is scheduled to receive over $100 million in incentives for building an engine assembly plant in Dundee MI.

And if you still think this is bad (more bad than, say, giving nearly a half-billion dollars to a foreign automaker), just wait until GM dumps their $89 billion in pension liabilities in the lap of the good ol’ PGBC!

You do know what the PGBC is, don’t you? Don’t Google it!

[JohnT]

I would like to point out that this

survey by Georgia officials finds more than 10,000 children of Wal-Mart employees are in state’s health program for children at annual cost of nearly $10 million to taxpayers;

and this

In 2002, the time period covered, Wal-Mart employed 42,000 associates in Georgia. Wal-Mart is Georgia’s largest private employer. Wal-Mart is the largest private employer in the U.S., employing over 1.05 million associates in 2002.

Almost a quarter of employees at Georgia’s Wal-Marts qualify to enroll their children in Medicaid.

do not say the same thing. Obviously somebody divided the number of children by the number of employees and got 1/4, but that’s not how you do it. You divide the number of employees who receive family assistance by the total number of employees to derive the correct percentage. The argument you present is fraudulent because the numbers are cooked.

Every time an uninsured Wal-Mart worker goes to the ER and can’t afford to pay for treatments, all Floridians are picking up the bill.

:rolleyes: Every time an uninsured mom 'n pop worker goes to the ER, all Floridians are picking up the bill. Every time an uninsured contractual state employee goes to the ER, Floridians are picking up the bill. Every time an uninsured Costco employee goes to the ER, Floridians are picking up the bill. Your quote is non-argumentative.

[Aeschines]

The conclusion I draw from this thread is that we need socialized medicine in this country to make the playing field more level.

[Sam_Stone]

And then we could have a national standard wage, to level it even more!